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Guochuang Lianhang: Comparison of several exit methods for private equity and venture capital funds (IPO, mergers and acquisitions, bet buybacks, S funds, etc.)

At present, the main types of private equity investment funds in my country include: initial public offering and listing (IPO); mergers and acquisitions; equity repurchase and liquidation. At the same time, the development of S funds provides more possibilities for the exit of private equity investment fund investors.

1. Exit through IPO: When an enterprise meets certain conditions and is approved by the China Securities Regulatory Commission to issue shares for the first time and be listed on the stock exchange, the private equity investment fund can exit by reducing its holdings through transactions.

(I) Advantages and limitations of IPO exit On the one hand, IPO exit is the most ideal exit method for both investors and target companies. Due to the amplification effect of the capital market, IPO is the exit method with the highest return. According to data from ChinaVenture Group, the return on IPO exit can often reach more than ten times. At the same time, strict supervision of listed companies ensures that the exit of private equity investment funds is compliant and orderly, with less legal risks. In addition, exiting through IPO means that the operating conditions of the target company have reached the expected level, which is an affirmation of the ability of private equity investment funds and can be used as a performance improvement of private equity investment funds in the market and industry.